Hospital debt once again on front burner in Augusta

CORRECTION: An earlier version of this story incorrectly stated that Maine had to take the federal government's deal by January. We regret the error.

AUGUSTA, Maine (NEWS CENTER) -- With just a few weeks to go in the legislative session, the focus in Augusta is once again on the $484 million debt Maine owes to its hospitals.

A legislative committee has been working on a bipartisan bill to get that debt paid, but Democrats want to combine that payment with an expansion of Medicaid under the Affordable Care Act. The question is whether the Medicaid expansion will benefit hospitals and the state, or will adding it to the hospital debt bill be a poison pill?

House Speaker Mark Eves said simply paying the hospital bill doesn't address the underlying problem of the rising cost of health care that's affecting both hospitals and the state. And that is why Democrats want to link paying the hospital bill to expanding Medicaid under the Affordable Care Act, an expansion that the Maine Hospital Association supports.

"We want to make sure the job is not just half done. We want to not just treat the symptom, but the whole problem," Eves said.

About 70,000 more Mainers would receive federally subsidized health insurance if the state agrees to the expansion. And the federal government would pay the full cost for three years. After that, the federal government's share would decline until 2020, when it would pay 90 percent. Democrats say if the state does not take the deal by January, more Mainers will lose health insurance.

According to the non-partisan Kaiser Family Foundation, the expansion would save the state $690 million over the next 10 years.

Rep. Eves said, "We want to make sure we put the hospitals on stable footing moving forward. That means paying the debt now, and it also means accepting those federal dollars so they get paid for their services and Mainers can go see a doctor."

Even though the Maine Hospital Association supports both the Medicaid expansion and the hospital payments, it's not on board with the Democrats' plan. It feels like hospitals should be getting paid, no strings attached.

Jeff Austin of the Maine Hospital Association said, "No matter what condition you put on it, even if we support it, putting conditions on us for paying overdue bills is just inappropriate. It's just wrong."

And the Hospital Association is concerned that the Medicaid expansion won't pass. House Republicans said that while they may eventually support expanding Medicaid, they need to be convinced that Mainers won't end up footing the bill. And they don't think an expansion bill can come together before fall.

House Republican Leader Rep. Ken Fredette said, "If the Democrats are insistent on linking Medicaid expansion to payment of the hospitals, the bill will die."

If the state doesn't pay its hospital bill by October, the price goes up another $5 million.